Idaho Internet service providers (ISPs) say that the way that the Idaho Education Network (IEN) is being set up could end up costing schools up to five times what they currently pay to connect to the Internet -- ongoing annual costs that would have to be borne by the general fund after a $3 million two-year grant runs out.
The ISPs also deny Department of Administration charges that they are coming in after the fact and trying to change the process, saying it was always intended for them to provide the "last mile" between a Qwest-built backbone and schools, and that it is Qwest that is changing the process by building expensive new connections when adequate connections already exist -- and risking putting local companies out of business in the process.

Idaho Internet service providers (ISPs) say that the way that the Idaho Education Network (IEN) is being set up could end up costing schools up to five times what they currently pay to connect to the Internet — ongoing annual costs that would have to be borne by the general fund after a $3 million two-year grant runs out.

The ISPs also deny Department of Administration charges that they are coming in after the fact and trying to change the process, saying it was always intended for them to provide the “last mile” between a Qwest-built backbone and schools, and that it is Qwest that is changing the process by building expensive new connections when adequate connections already exist — and risking putting local companies out of business in the process.

The IEN, a $50 million project intended to provide high-speed Internet connectivity to all Idaho schools, as well as provide it to the local community, has been controversial for more than a year, ever since allegations first surfaced that Qwest had been awarded the contract before the mapping process had been completed. However, criticism ramped up sharply this legislative session, first with Syringa Networks — which had originally been awarded a share of the contract with Qwest, but which claimed it was being shut out of the process, and even from its existing customers — filing a lawsuit, and with legislators hearing from numerous constituents the contention that duplicate infrastructure was being built.

(The budget for the IEN was supposed to be set last Friday, but was held off at the request of Legislative leadership until after mediation was held this week on the lawsuit, said Joint Finance-Appropriations Commitee co-chair Senator Dean Cameron, R-Rupert, on Idaho Public Television’s Idaho Reports on Friday.)

Concern was such that Senate Education Committee chairman Senator John Goedde, R-Coeur d’Alene, held an informal joint hearing on Wednesday of both the Senate and House Education Committees to let the ISPs raise their concerns and to hear from the Department of Administration, which is managing the IEN project for the Department of Education. There, a number of ISPs described how they were already providing adequate Internet services to a number of schools. Department of Administration representatives such as Melissa Vandenberg, deputy attorney general for the department, noted that the ISPs had the opportunity to apply for the statewide contract and that they had not done so, and were now coming in after the fact and trying to change the contract. “We don’t allow someone to come in after the prices are already disclosed and the cost disclosures are public record to come in and say, ‘I can do it cheaper,'” she said, according to an AP story by John Miller.

But that’s not what they’re doing, said Kevin Owen, CEO and president of First Step Internet LLC, which provides broadband Internet access to 12 schools in central Idaho, including Moscow. First Step is the only remaining Idaho company still waiting to hear from the federal government about whether it will be awarded a broadband stimulus grant of $1.5 million to provide Internet access to underserved populations in the counties of Latah, Nez Perce, Lewis, Idaho and Clearwater.

The way the state request for proposal (RFP) was set up, few but the largest companies could even think about applying for it, Owen said. “They said they wanted a single statewide network,” he said. “There’s not a company in the state than can provide that” — including Qwest, he said. Instead, the intention had been that Qwest would provide the backbone, while local companies would provide the “last mile” of connectivity. “We all had been told they’d work with local providers,” he said.

Instead, Qwest is installing new fiber, sometimes when fiber already exists and sometimes when fiber is more expensive than other methods, such as the microwave system First Step uses for some of its customers, Owen said.

Some of the legislators have objected to the local providers being cut out of the process. “Sen. Gary Schroeder, R-Moscow, suggested that the issue is analogous to the state suddenly deciding to get a statewide contractor to provide food service at all schools, pushing out of business local providers who already might be doing that locally at much lower cost, but aren’t in a position to bid for a statewide contract,” wrote the Spokesman Review‘s Betsy Russell in her blog. ““Pretty quick we’re over to having statewide services, and what we do is we replace these gentlemen with bureaucrats on the public payroll,” Schroeder said.”

In addition, the ISPs are providing documents to legislators showing that what Qwest is charging schools for the new connectivity is significantly more expensive than what the ISPs have been charging. Some of this is a flat $1000 a month fee for services such as coordinating the filing of documentation with the federal government for a program, called E-Rate, that pays for a share of the cost. But even just comparing transmission costs, the Qwest expenses are significantly higher, the ISPs say.

For the next two years, the schools’ share of the IEN’s costs are being borne by a $3 million grant from the J.A. and Kathryn Albertson education foundation. However, after the grant is used up, schools — which are seeing their budgets cut for the first time this year — will have to pay those costs.

For example, Owen said his company has been charging the Moscow schools $1,000 per month for fiber connections, while the IEN will be charging $5,000, plus the services fee. Schools are going along with it for now for several reasons, he said. First, for the next two years, it will be free to the schools. “Nobody’s going to take any charge over free,” he said. Second, schools are not allowed to use certain services that the IEN provides, such as video teleconferencing that allows students to take classes from other schools using the broadband Internet connection, unless they sign up for IEN, he said. Finally, some of the schools just don’t yet realize how their expenses will change after the grant expires, he said.

Owen, who said he has heard indications that Qwest is fast-tracking the process by adding schools ahead of schedule, said he hopes the Legislature decides to put a hold on IEN funding until the process is examined more closely — even though Superintendent of Public Instruction Tom Luna has said such a hold would kill the IEN. “We all want to take care of the kids,” he said. “Qwest only shows up because there’s a giant pot of money.”

Full disclosure: Sharon Fisher is a candidate for the Idaho Legislature, District 21.